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To add or not to add value: How and why scientific research delivers different answers on the business case

The basic question IF Diversity CAN add value in a business organisation has been investigated by many scientific studies. Due to the nature of academic approaches, each study had to focus on selected aspects and found – depending on the chosen approach – different answers. More recent research tried to identify circumstances under which positive effects of diversity can be observed. Other projects tested possible negative effects created by differences, such as conflict or misunderstanding. Two current academic contributions reach seemingly conflicting conclusions.

Researchers from Aarhus University and University of Lausanne analysed how workforce diversity can be linked to the productivity of a sample of companies in Denmark. For their investigation, they used a matched employer-employee data-set, looking at two fundamental mechanisms which had already been identified by earlier research: On the one hand possible negative effects of diversity due to poor communication, lower social ties and trust, as well as poor collaboration among workers. On the other hand positive impacts of diversity on decision-making processes, problem-solving, (higher) creativity and (better) information about global product markets. The research project aimed at finding out which of the two would outweigh the other. They focused on three dimensions of diversity: cultural background, education and demographic characteristics, and used the Herfindahl index for their analysis. Their main findings were that education diversity can be significantly and positively associated with firm productivity. Conversely, diversity in demographics or ethnicity is either not associated or negatively correlated with firm productivity. The authors, however, did not look at other influencing factors that may have been present or absent and hence leave readers wondering, why other studies found more positive correlations.

A Frankfurt-based research team of Professor van Dick looked at a different set of data to identify critical elements that would turn diversity into a positive feature. For their research they conducted a field study with 316 university students with diverse backgrounds and asked them to work in groups on certain projects. Interestingly, the students who had a positive attitude towards diversity could better identify with other group members, which led to a higher performance of the team. For students with no or a rather negative attitude towards differences, no correlation was found. Van Dick and his colleagues conducted further studies with similar hypotheses, whereas the vast majority of their analysis showed that the paramount aspect is a positive attitude towards difference(s). Even more, the study found that positive effects can even occur, when open-mindedness is there, but diversity is not.

The overall message from these studies is relatively clear and consistent with previous findings: A large-scale meta-analysis of almost 100 studies all of which compared the success of homogeneous vs. heterogeneous teams found that all those studies that saw a positive edge for heterogeneous teams included a piece of diversity awareness or skill-building for the diverse team, whereas homogeneous teams performed better if their mixed competitors were left with no briefing. This key learning corresponds with van Dick’s findings: Diversity needs a conscious element of awareness or fostering of openness in order to become a competitive advantage. As described in the Editorial of this edition, the Propelling Potential Principle models the required elements. If the elements of open-mindedness and inclusion are ignored, positive or negative effects may occur as the Danish-Swiss study shows.